WWD Image

NEW YORK — Double-digit gains in royalties and product sales sent earnings soaring for Guess Inc. in the third quarter and nine months.<BR><BR>For the three months ended Sept. 25, the Los Angeles-based denim designer and retailer saw earnings...

NEW YORK — Double-digit gains in royalties and product sales sent earnings soaring for Guess Inc. in the third quarter and nine months.

For the three months ended Sept. 25, the Los Angeles-based denim designer and retailer saw earnings explode 76.6 percent to $11.8 million, or 27 cents a diluted share, besting Wall Street’s consensus estimate of 24 cents. The company reported earnings of $6.7 million, or 15 cents, in the year-ago quarter.

Total revenues spiked 18.7 percent to $197.8 million from $166.7 million. Combined sales from the company’s 269 stores along with its wholesale business advanced 17.2 percent to $183.6 million from $156.5 million, with wholesale sales contributing $51.4 million in the quarter. Retail comparable-store sales rose 10.9 percent. However, the company made its largest stride in royalties, which vaulted 41.1 percent to $14.3 million from $10.1 million.

“We recently announced the planned acquisition of our jeanswear licensee in Europe, which will help accelerate our expansion in this key market,” said Paul Marciano, co-chairman and co-chief executive officer, in a statement.

The company found its way back into the black for the nine months, posting earnings of $14.7 million, or 33 cents, against a loss of $4.5 million, or 10 cents, in the same period a year ago.

Again, double-digit gains in sales and licensing royalties drove total revenue up 15.5 percent to $505.3 million from $437.3 million. Retail and wholesale sales combined grew 15.2 percent to $470.4 million from $408.4 million, with the wholesale segment contributing $123.6 million. Royalties jumped 20.7 percent to $34.8 million from $28.9 million.

— Ross Tucker

This story first appeared in the October 29, 2004 issue of WWD. Subscribe Today.